An explosion
in a chemical factory, located in Xiangshui County, Jiangsu Province, killed 47
with 90 injured on March 21st, 2019, according to the state media.

The
explosion was so intensive that the CSN (China Seismological Network) could
even observe the vibration, which was equal to a 2.2 magnitude earthquake.

The main
factory of this explosion is Jiangsu Tianjiayi Chemical Co., Ltd., founded in
April, 2007, with 195 staffs. The main production of this factory is chemical
raw materials and chemicals, including hydroxybenzoic acid and anisole. The
main explosive substance leading to this serious blast was benzene. The general
manger of Tianjiayi Chemical Co., Ltd., was injured during the explosion and
was being cured. The people involved were under control by the police.

Jiangsu Tianjiayi broke regulations many times

Jiangsu
Tianjiayi Chemical Co., Ltd., was against regulation many times. The company
was fined for the violation of the Management System of Air Pollution Prevention
and Control as well as the Management System of Solid Waste from the state Environmental
Protection Agency in September, 2017. In the same year the company faced
another forfeiture in June for breaking the rule of the Management System of Solid
Waste and the system of Environmental Impact Assessment.

An
immediate rescue and evacuation was taken after the explosion. The people
living in the areas near the accident spot were evacuated to the safe zone. Classes
were suspended in schools and kindergartens for the occasion.

The cause
of the blast was under investigation, but concerns about chemical pollution in
the environment were sparked. According to the characteristics of contamination
in this explosion, the environmental air emergency monitoring indicators were
confirmed as organic pollutants, including sulphur dioxide, nitrogen oxide, benzene,
toluene as well as xylene. However, the drinking water safety of the locals was
not affected by the pollution. Relevant measure, such as blockade of the inland
rivers, was taken immediately.

By the
explosion an alarm is sounded in terms of the safety issue at chemical plants
in China. According to a report from CCTV. com, the General Office of the State
Administration of safety supervision once pointed out 13 potential safety hazards
in Tianjiayi chemical plant on February 8th , 2018, which could be
one of the suspected causes of this explosion. What was worse, Tianjiayi
factory had been fined time after time by the county environmental protection
authority and the city environmental protection authority for disobeying the
environmental protection ordinance.

Although special
attention to major accidents was emphasized during the 19th National
Congress in China, it was evident to see that individual groups still did not
put the safety in production in the first place.

After the occurrence
of accident the state warned the heads and security staffs of the chemical
plants and factories from the whole Jiangsu Province with an education
activity, rapidly inspected the safe production of dangerous chemicals and
screened thoroughly all kinds of hidden danger.

The company is the second biggest producer of m-Phenylenediamine
in China

As the
second biggest manufacturer of this chemical, Jiangsu Tianjiayi Chemical Co.,
Ltd. could produce 17 thousand tons of m-Phenylenediamine (a type of dye
intermediate) per year. The explosion directly causes a shortage of supply of m-Phenylenediamine
with an increasing price, which also leads to a sharp growth in the price of
disperse dyes of downstream.

In
addition, due to the location of Tianjiayi Chemical Co., Ltd, the accident also
brought a delay of resumption of work to the dye intermediate factories in the
north of Jiangsu Province. The nearby industrial sites will be also affected in
the aspect of the price of disperse dyes and reactive dyes.

Generally 99
thousand tons of m-Phenylenediamine can be produced per year in China. The main
manufacturers are respectively Zhejiang Amino Chemicals Co., Ltd. with 65
thousand tons per year, Sichuan Hongguang Special Chemical Co., Ltd. with 17
thousand tons per year, and Jiangsu Tianjiayi Tianjiayi Chemical Co., Ltd. with
17 thousand tons. The accident of Tianjiayi affects around 20 percent of market
capacity of m-Phenylenediamine with a rising price of the chemical.

The capacity of m-Phenylenediamine is expected
to decrease to about 70 thousand tons

According
to the head of consultation department of Qicaiyun (an e-commerce company of
dye products and chemicals), on the day of the accident dye intermediate
companies stopped receiving orders. Just for two days a growth of the actual
transaction price of disperse dyes already showed up, in the meanwhile the demand
of disperse dyes were also witnessed with an increase in their Wechat
transaction group. At the moment, the EXW price of m-Phenylenediamine has
increased from 47 thousand yuan per ton to 100 thousand yuan per ton. Besides,
the price of disperse dyes also started to ascend from March 24th.

As for the
supply of raw materials, the theoretical capacity of m-Phenylenediamine is
expected to decrease in 2019 to about 70 thousand tons from 99 thousand tons
after the explosion in Tianjiayi, with an expected consumption of 80 thousand
or so tons in 2019.

Moreover,
companies in the nitrification and hydrogenation reduction industry will be
inspected significantly owning to the accident, which results in a reduction of
supply and an increase of price of dye intermediates.

It is
reported that some relevant dye enterprises in the ecological chemical plant in
Xiangshui, Yancheng City, Jiangsu Province has been in a shutdown state, such
as Jiangsu Annuoqi Chemical Co., Ltd. and Jiangsu Zhijiang Chemical Company.